Governor Walker Vetoes $1.29 Billion To Preserve State Savings

June 29, 2016

Press Release: 16-060

Urges Legislature to Put Alaska on a Sustainable Path

ANCHORAGE—Governor Bill Walker announced today he vetoed $1.29 billion from the budget bills passed by the 29th Alaska Legislature. Since the legislature passed the budgets for fiscal year 2016 (July 1, 2015 – June 30, 2016) and fiscal year 2017 (July 1, 2016 – June 30, 2017) without any way to pay for them, Governor Walker used his veto authority to protect the state’s primary savings. In addition to the $1.29 billion in vetoes, Governor Walker ordered a stop to $250 million of spending on transportation projects.

“Drawing down from limited savings to fund the budget is not a viable plan,” Governor Walker said. “We have a $4 billion deficit, which means the status quo is not on the menu. Despite the legislature’s inaction, I’m still going to make sure Alaskans get a sustained permanent fund dividend.”

These are some of Governor Walker’s line-item veto actions:

providing for a PFD check of $1,000 per person by reducing the $1.362 billion permanent fund dividend appropriation to $695.6 million

reduced the $430 million appropriation for oil tax credits to the Governor’s original proposal of $30 million, the statutory minimum requirement

reduced department spending by $38 million

12 executive branch departments’ budgets have been cut 20 percent or more in the last two years

Reduced school debt reimbursement and rural school construction 25 percent, $30.5 million and $10.4 million respectively

“Not a single one of these decisions was made lightly,” Governor Walker said. “I especially struggled with the funding to education, which I have consistently prioritized. But a $4 billion deficit means nothing can be insulated. What’s disappointing is this was completely avoidable. My team and I introduced a balanced plan in December that fairly distributed the burden across all demographics. Not a single measure of that plan was passed by the legislature, nor was another plan even introduced. I thank members of the Senate for having made the fiscally responsible decision to pass the Permanent Fund Protection Act—a vote some House members refused to even take.”

During the 149 days legislators were in regular, extended and special sessions, the legislature reduced $400 million, solving 10 percent of the problem and leaving 90 percent of the work undone. Legislators’ top reasons for failing to pass the Permanent Fund Protection Act, the cornerstone of the New Sustainable Alaska Plan, were that a) state spending had not been cut enough; b) credits to oil companies needed to be reduced; or c) legislators did not want to take the political heat for reducing the PFD amount.

“I’ve now done that work; I’ve taken all their excuses off the table, so I urge legislators to come back and finish Alaska’s work,” Governor Walker said. “Alaskans, please ask your representatives and senators to do what is best for Alaska’s future; not what is best for their own political futures.”